Inflation rate up to 6.1 percent in May

In addition to the overall inflation rate, CBS also calculates monthly average price developments if energy (gas, electricity and district heating) and motor fuel prices are not taken into account. Excluding energy and motor fuels, inflation would have been 7.9 percent, up from 7.8 percent in April.

Inflation is measured each month as the increase in the consumer price index (CPI) relative to the same month in the previous year. The consumer price index shows the price development of a package of goods and services as purchased on average by Dutch households. An inflation rate of 6.1 percent in May 2023 means that consumer product prices were 6.1 percent higher than in May 2022. This means the 6.1-percent inflation in May was not on top of the 5.2-percent inflation in April.

Inflation up due to price development of energy

The price development of energy (electricity, gas and district heating) had an upward effect on the inflation rate. Although energy was 24.9 percent cheaper in May than in the same month last year, in April the year-on-year price decrease was 32.2 percent.

New method of calculating energy prices

As from the reporting month of June 2023, in which the flash estimate will be published on 30 June, CBS will employ a new method to measure energy prices in the CPI. Under the current method, the price development of energy is measured on the basis of new energy contracts. The new method uses transaction data provided by energy suppliers, so that the tariffs paid under long-standing energy contracts can also be taken into account. This will result in a more accurate inflation rate. On 2 March, CBS published an update on its research into the new method of measuring energy prices.

Motor fuels cheaper

The price development of motor fuels had a downward effect on the development of inflation. Motor fuels were 18.3 percent cheaper in May than twelve months previously; in April, this was 12.7 percent.

Price developments in the short term

CBS publishes a monthly report on inflation: the development of the CPI compared to the same month one year previously. However, this figure says nothing about the development of prices during such a twelve-month period. The CPI can also be used to calculate the average price development compared to the previous month.

Consumer prices rose by 0.2 percent in May 2023 relative to April. The price level during the past twelve months was the highest in October 2022. After that, the trend was downward until February 2023. Prices have increased for four months in a row since then.

On a side note, when comparing with the previous month, seasonal influences must be taken into account. For example, airline tickets are more expensive during holiday months than in months outside the holiday season. Prices are temporarily higher then, but this is not a structural price increase. Due to these seasonal influences, month-on-month developments are often more volatile than year-on-year developments.

Euro area inflation down

Since 1996, CBS has published two different inflation rates: one based on the Consumer Price Index (CPI) and one based on the Harmonised Index of Consumer Prices (HICP). According to the European HICP, consumer goods and services in the Netherlands were 6.8 percent more expensive in May than in the same month last year, up from 5.8 percent in April. Inflation in the euro area fell from 7.0 percent in April to 6.1 percent in May.

Difference between CPI and HICP

In order to facilitate comparison between countries, EU member states calculate a consumer price index according to internationally agreed definitions and methods. The European Central Bank (ECB) uses the HICP to formulate its monetary policies in the euro area. In addition, most countries produce their own national consumer price index.

The main conceptual difference between the CPI and the HICP for the Netherlands is that, unlike the CPI, the HICP does not take into account the costs related to home ownership. In the Dutch CPI, these costs are calculated based on developments in rental property prices. The differences are further explained in the article Differences between consumer price figures.